Forbes: Speaking of Asus, the ROG Swift seems like a great example, because all reports indicate it’s constantly selling out at $749, which is obviously more expensive than an equivalent non G-Sync monitor.
Tom Petersen: “That tells me the price is probably too low. Commercially, if the price is too high you’ve got heavy stock, and prices come down to move that product. So I think as a very first principle, it’s important to differentiate in your mind the difference between price and cost. Cost is what determines profitability. So from an OEM’s perspective, they want to build products where the cost of manufacturing is lower than the price. So when I hear people talk about pricing, what I think a lot of people don’t understand is…most of the time, Nvidia or Asus or Newegg doesn’t really set the price. You get to effectively accept or not accept what the market is doing about pricing. The market is saying ‘I love this monitor, reviews are awesome, I’m willing to pay this much money.’ If you look at a FreeSync monitor and say ‘oh, they’re cheaper,’ that’s likely because the OEMs believe that the market will only tolerate a lower price. They’re not setting it lower because they want to make less money.
Let’s use another example, AMD’s Radeon 295×2. It launched at $1499 last year. Since then, the price of the 295×2 has been cut in half. Do you think AMD’s partners lowered the price because they wanted to make less money? Of course not! The market gave them feedback and said ‘I know it seems reasonable that this would be a $1500 part and you’re delivering a lot of performance, but that’s not the price.’ So then AMD said ‘Maybe $999 is the price.’ And the market responded by saying ‘nope, not quite.’ The G-Sync enabled ROG Swift has only come down in price by $50 in the last year. That’s because demand is there.
We come back to one of AMD’s principle arguments about our cost being higher than their solution. That’s absolutely true. But you know what? That’s an Nvidia problem. It’s completely unrelated and irrelevant to the consumer. You don’t bitch at Ford for having spark plugs that are platinum plated and cost 4 cents extra.”